What can cause actual loss in marine insurance?

In marine insurance, actual loss occurs when the insured item or cargo is completely lost or destroyed. Total destruction of the thing insured is a clear and straightforward scenario where the insured party would experience a full loss, resulting in a valid claim under the policy. This means that the insured will receive compensation for the entire value of the insured item, as there is no recovery or salvage possible.

Partial damage to cargo, while it does result in some loss, does not equate to total loss, as the cargo can still retain some value. Theft of cargo is also considered a significant loss, but does not always equate to total destruction, as it depends on whether the cargo is recoverable. Delay in shipping, while impactful in terms of financial loss or opportunity, does not constitute an actual loss of the cargo itself. Instead, it refers to a disruption in the delivery schedule rather than a loss of the item’s value or existence.